Sales at U.S. retailers increased 0.1% in December, the government said Thursday, in a report that bucked expectations of stronger sales during the holiday period.

“Apparently, all those reports of a robust holiday shopping season were made by people too much into the holiday spirits as retail sales did not surge in December,” said Joel Naroff, president of Naroff Economic Advisors, Inc.

Electronics were touted as one of the strongest sectors for holiday shopping. But the Commerce Department’s data showed a 3.9% monthly decline at electronic stores.

The Retail Sales Report released this morning shows that retail sales in December were up 0.1% month-over-month (but the Census Bureau notes that the statistical confidence range is ±0.5%). That was well below the Briefing.com consensus forecast of 0.4% and Briefing.com's own expectation of 0.5%.

The charts below give us a rather different view of the U.S. retail economy and the long-term behavior of the consumer. The sales numbers are adjusted for population growth and inflation. For the population data I've used the Bureau of Economic Analysis mid-month series available from the St. Louis FRED with a linear extrapolation for the latest month. Inflation is based on the latest Consumer Price Index. December retail sales adjusted accordingly rose 0.1% month-over-month but only 2.4% year-over-year, far less than the 6.5% nominal YoY increase.

Consider: During the past 20 years, the U.S. population has grown by 23% while the dollar has lost about 39% of its purchasing power to inflation. When we adjust accordingly, the rebound in retail sales from the bottom in April 2009 merely gets us back to the per capita spending of December 1999, over twelve years ago.

Retail sales have been recovering since the trough in 2009. But the "real" consumer economy, adjusted for population growth is still in recession territory — 7.0% below its all-time high in January 2006.

Considering the massive 50% off entire store sales that it took to clear merchandise in December, this may have been the last gasp of this economic "recovery".

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